The adult-entertainment industry has been battling what it perceives to be overbroad regulation since 2009, when organizations and individuals affiliated with the industry filed a complaint challenging the constitutionality of two statutes, 18 U.S.C. Sections 2257 and 2257A. These statutes require producers of sexually explicit content to keep records of the performers’ ages and make them available to the attorney general “for inspection at all reasonable times.”

The goal of these regulations, of course, is to verify that pornographic material only features people who are 18 or older, and to prevent the creation of child pornography. However, the plaintiffs in this case say the requirements infringe on their First and Fourth Amendment rights. And this time, a court is listening to them.

Both the 6th Circuit and the D.C. Circuit have upheld these statutes against constitutional challenges before. In this case, Free Speech Coalition et al. v. Attorney General of the United States, the district court went the same route, granting the government’s motion to dismiss.

But on April 16, the 3rd Circuit vacated the district court’s decision and instructed the plaintiffs to engage in discovery to determine if the statutes really are overbroad.

Balancing Interests

With regard to the plaintiffs’ First Amendment claim, the 3rd Circuit did agree with the district court that the statutes are content-neutral, that is to say not singling out porn because of disagreement with its message, and thus subject only to intermediate, not strict, scrutiny.

To survive intermediate scrutiny, a statute must advance a substantial governmental interest, be narrowly tailored enough not to burden more speech than necessary and leave open alternative communication channels.

The court wrote that the recordkeeping requirements did indeed advance a substantial government interest—“protecting children from sexual exploitation by pornographers.” The challenge for the plaintiffs, then, is to prove that the statutes burden more speech than is necessary.

“The government really has such a strong substantial interest in protecting children, and even this court is giving that credence,” says Foley & Lardner Partner Lisa Noller. “The plaintiffs have a huge uphill battle.”

In her concurrence, Judge Marjorie Rendell disagreed that the government sufficientlyproved that the statutes advance this interest. “The record contains no evidence as to producers’ or the government’s experience under the statute, and, therefore, no means of assessing whether the requirements actually have had any deterrent or preventative effect,” she wrote.

The plaintiffs brought both an as-applied challenge and a facial challenge, which, if upheld, would invalidate the regulations. The facial challenge will be more difficult for the plaintiffs to prevail on, because, as the court wrote, “a single impermissible application cannot invalidate a statute.”

Some instances in which the statutes may be considered unnecessary include the production of elder porn and private videotaping between consensual adults at home, to both of which the statutes currently apply.

After the plaintiffs develop the record further around their Fourth Amendment claim that the statutes authorize the government to conduct searches and seizures without a warrant, the court will have to determine if an administrative search exception applies. This exception waives business owners’ reasonable expectation of privacy for companies that are considered to be part of a “closely regulated industry.” However, there is some debate as to whether adult entertainment could qualify as a closely regulated industry (see “Eschewing Exceptions”).

Resisting Regulations

If, after plaintiffs conduct discovery, the court decides that the administrative search exception does apply in this case, there could be ramifications for other industries that are subject to similar recordkeeping requirements, Noller says. In-house counsel who work in industries with these sorts of requirements will want to keep an eye on this case as it proceeds because “if you’re ever looking to challenge on Fourth Amendment grounds the warrantless searches of your books and records, you’re going to need to know what level of detail you need to learn before bringing that case,” Noller says.

The 3rd Circuit’s reversal on the plaintiffs’ First Amendment claims should be heartening to legal departments as well. “If you are in a business that has information at its core, the First Amendment is your friend,” says Thomas Julin, a partner at Hunton & Williams. “Even in very difficult circumstances, like when you’re dealing with sexually explicit activity and there have been lots of prior adverse judicial rulings, if you keep at it, you can ultimately succeed.”

The issue of overregulation is something in-house lawyers run into often, says Leonard Niehoff, a professor at the University of Michigan Law School. Congress writes a statute, with the goal of fixing a problem, and compliance can be expensive. “One of the challenges that inside counsel face is looking at a statute or regulation and saying to themselves, ‘This literally would reach what my client does, but do I feel comfortable saying my client doesn’t have to comply because [it] is outside the spirit of the regulation?’” Niehoff says. “What in-house lawyers do under those circumstances is they talk with their clients and reach a joint decision that lays out the risks and the benefits appropriately.”